On 14 September 2020, the FCA finalised its additional guidance setting out how firms should provide tailored support to mortgage borrowers who have benefitted from payment deferrals under its June 2020 guidance and who continue to face financial difficulties, as well as those whose financial situation may be affected by coronavirus after 31 October 2020.

The FCA’s current guidance published in June will continue to provide support for those impacted by coronavirus until 31 October 2020 – with consumers able to take a first or second three-month payment deferral until this date. The June guidance is due to expire on 31 October 2020 and the FCA does not intend to extend the guidance. The additional guidance now published is intended to ensure that consumers will still be able to obtain the support they need from their lenders after their payment holiday ends or they are newly affected by coronavirus after 31 October 2020.

The FCA consulted on the additional guidance in August 2020 (our blog is here) and there have been certain changes. These include amendments to:

  • Clarify proposals that allow firms to offer broadly appropriate forms of short term support for certain types of customer coming to the end of a payment deferral period without having to demonstrate that this is appropriate for their individual circumstances, providing they review this within 60 days to ensure any ongoing support is appropriate.
  • Allow firms to adopt this approach for eligible second charge customers, and to offer capitalisation to those customers on the same basis as first charge customers.
  • Make clear FCA expectations of firms when responding to customer vulnerabilities in the additional guidance, rather than referring to the draft FCA vulnerability guidance in Guidance Consultation 20/3, to avoid confusion.
  • Clarify FCA expectations of firms considering pursuing repossession.

The additional guidance applies from 16 September 2020 and remains in force until varied or revoked.